By on July 31, 2014

Tesla Model S Test Drive At The Panasonic Center Tokyo

It’s official: Panasonic and Tesla have signed an agreement regarding their partnership involving the Gigafactory.

In their joint press release, Tesla will be responsible for preparing, providing and managing the basics of the factory, while Panasonic will build and provide the cylindrical lithium-ion cells needed for Tesla’s battery packs, as well as any equipment Tesla may need. Tesla will also continue to purchase cells from Panasonic’s factories in Japan to meet projected demand.

Tesla Chief Technical Officer J.B. Straubel said the Gigafactory “represents a fundamental change in the way large scale battery production can be realized,” especially when it comes to dramatically reducing the cost of energy storage “across a broad range of applications.” Panasonic Executive Vice President Yoshihiko Yamada added that the Gigafactory partnership would “accelerate the expansion of the electric vehicle market” once production of Panasonic batteries begin.

The Gigafactory is expected to produce 35 GWh of cells and 50 GWh of packs annually by 2020 for both electric vehicles and stationary applications, employing up to 6,500 to produce the batteries.

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24 Comments on “Panasonic, Tesla Enter Into Gigafactory Agreement...”


  • avatar
    redav

    Clearly, Tesla wants to sell batteries to other companies, which explains opening up their patents for anyone to use.

    So, the question is then: Who will buy all these batteries?

    • 0 avatar
      319583076

      Taxpayers will buy them indirectly for government vehicles. Hooray for us!

      • 0 avatar

        If it makes us less dependent on oil and decreases our carbon footprint, what would be so bad about that? Get us some range and quick refueling and its a no brainer, as long as they don’t catch on fire.

        • 0 avatar
          Jeff Weimer

          Not particularly. Most electric vehicles get their power from fossil-fuel plants; who will use more fuel to provide the electricity.

          • 0 avatar
            jhefner

            Hardly any plants burn fuel oil for long term electricity generation; though some may use it as a startup fuel. Most fossil fuel plants nowdays burn either coal or natural gas; and there is a decent amount of alternative energy coming online as well.

    • 0 avatar
      mcs

      >> So, the question is then: Who will buy all these batteries?

      Laptops, battery powered drills and other tools. Electric tooth brushes, shavers… We could use them in applications for robotics as well. If they can make other form factors, the factory could produce batteries for devices like cell phones.

      There’s a huge appetite for lithium batteries outside of the auto industry. I don’t see a problem selling everything that factory can produce.

  • avatar

    Smoke and mirrors. There is no suppressed battery technology that will allow Tesla to build them significantly cheaper. Panasonic has been building Li-ion cells for four decades. If there was a way to build them 30% cheaper you can bet that Panasonic would already be doing it.

    • 0 avatar
      SCE to AUX

      The answer is recycling. Tesla plans to recycle the raw battery materials for use in new batteries. It’s the only way – at this time – to substantially reduce cost to make the Model 3 affordable.

      • 0 avatar
        redav

        To hit their price target, I don’t think any one silver bullet will work. They are aiming to cut 30% out of the cost of batteries. They are switching aluminum for steel. It obviously will be smaller and so use less materials overall. I’m sure there are several other areas they are trimming costs.

        • 0 avatar

          They need volume to achieve the economy of scale they need. They can’t do that with their direct purchase model. We’re going to see some changes in Tesla’s business model to adapt to the realities of what happens when you go mass market from niche.

    • 0 avatar
      Beerboy12

      Mass production… cost per unit comes down. The business logic is as old as the hills.

    • 0 avatar
      mcs

      >> Panasonic has been building Li-ion cells for four decades

      I believe 1985 is considered the birth of the modern lithium-ion cell. The first commercial Li-ion cell was 1991 produced by Sony and Asahi Kasei. Panasonic developed it’s first lithium-ion battery in 1994 – 2 decades ago. You’re confusing lithium-ion with graphite-fluoride lithium batteries which were developed in 1971.

    • 0 avatar
      mcs

      >> If there was a way to build them 30% cheaper you can bet that Panasonic would already be doing it.

      Nano-structured carbon anodes increase density of lithium-ion batteries by 30% – so there you have it. Energ2 started production of the new anodes about a year ago, so I’d assume it’s not in production batteries yet – although I could be wrong. It doesn’t require a change in the battery design or a different manufacturing process, so it’s probably doable in the Gigafactory time frame.

  • avatar
    SCE to AUX

    While I understand Tesla’s approach to battery pack production by using the 18650 format (great for a startup, easily packaged in endless configurations, readily available), I don’t understand why they’re sticking with it.

    The 6000+ cells packaged into a battery cannot be as space efficient as a dedicated cell design. I would expect them to migrate to a custom cell, but that apparently won’t happen.

  • avatar
    Beerboy12

    Good, progress.

  • avatar

    Tesla has HUGE technical issues to overcome. I understand a Model S went into limp mode only a third of the way around the “Ring” in Germany. I also hear the battery life at AutoBahn speeds is about 40 minutes. For all of Tesla’s technical achievement, there are still some whoppers to be dealt with if they want to achieve mass market volumes.

    • 0 avatar
      mcs

      >> I also hear the battery life at AutoBahn speeds is about 40 minutes.

      Because the mass market in the US won’t accept a car that can’t maintain 125 mph for more than 40 minutes? Our 15 mph commute speeds shouldn’t be an issue! Although, I regularly encounter plenty of inefficient drivers that would probably destroy the range almost as quickly as the Autobahn – so maybe you have a point.

    • 0 avatar
      redav

      That’s due to heat generation from sustained high-power output. The battery gets hot and switches into limp mode to prevent damage. The problem goes away with a better battery cooling system.

  • avatar
    Z71_Silvy

    Panasonic you really shouldn’t be tied to a company like Tesla. Low quality products and a completely backwards business model in a highly competitive segment is only going to spell disaster.

    • 0 avatar
      SCE to AUX

      Your advice is about 10 years late.

      Panasonic has nothing to lose from this arrangement. If the Tesla thing barfs, they can just walk away from the gigafactory and continue with life as it was before.

      As for being competitive, in today’s BEV market there is only Nissan and Tesla; everyone else is a bit player. I’d say they have the competition thing taken care of.

      However, Tesla’s quality remains a big question. If the milling issue in the drivetrain isn’t worked out, it could be bad for Tesla.

  • avatar
    Discoman

    What may not be largely known is that Tesla already has agreements in place and is supplying Toyota and BMW, and possibly other manufacturers batteries for use in hybrid and electric vehicles. Opening up the patents for others to use could foster and develop demand for more batteries that are proven to work with the technology. Get the gigafactory going, and BOOM! Batteries are a selling.

    It’s a big gamble, and we will be wondering why we didn’t buy stock in the company when we had the chance–if Musk can pull it off.


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